South Korea approves income tax on cryptocurrencies

From 2023, individuals in South Korea will be required to pay 20% income tax if their cryptocurrency trading profits exceed 2.5 million Korean won.

As reported by Asia Today, the South Korean government has issued an amendment introducing a tax on profits from cryptocurrency trading starting in 2023. The amendment also introduces various additional taxes on capital gains with a progressive tax schedule on income from stocks.

Any cryptocurrency holder whose annual profit from trading in cryptoassets exceeds 2.5 million won (about $ 2,300) will pay 20% tax. This threshold is much lower than for stocks, where only profits in excess of 50 million won ($ 46,000) would be taxed.

The value of cryptocurrencies that were owned by the owner prior to the entry into force of the new taxation regime will be valued either at the highest market price of the cryptoasset immediately prior to 2023, or at the actual acquisition price.

The proposed taxation system has been under development since the beginning of last year, but its adoption has been postponed several times. In November, the South Korean National Assembly Committee proposed to postpone the introduction of income tax on cryptocurrency activities until January 2022. This was due to the fact that local cryptocurrency exchanges would not have enough time to create the proper infrastructure for filing tax returns.

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